CENTRAL VIEW for Monday, August 3, 2009

by William Hamilton, Ph.D.

CARS: Test drive the 2009 Fiasco!

For a preview of how the Obamessiahs will manage your health care under socialized medicine, just look at the fiasco the National Highway Traffic Safety Administration (NHTSA) has made of the relatively simple Car Allowance Rebate System (CARS), which is also known as: Cash for Clunkers.

So many clunker owners have been attracted by the idea of getting a “free” $3,500 to $4,500 from the American taxpayer that they have either consumed the entire $1 billion dollars initially authorized by Congress and/or exceeded the 250,000 limit on the number of clunker slots in the program. (Question: With the American auto industry on the ropes, why does CARS provide your tax dollars for new cars made overseas by non-American companies?)

Last week, the massive number of CARS applications crashed the computer at NHTSA, causing the National Automobile Dealers (NADA) to warn its members that the government has no way of keeping track of just how many deals have been made. Moreover, the on-line application process is so complex and time-consuming that some car dealers won’t touch the program.

Note that the car dealers must advance up to $4,500 to qualified buyers and, as they watch their new cars being driven off their lots, they can only hope the government will reimburse them -- someday. Some already cash-strapped car dealers are on the hook for over $80,000, causing a number of dealers to add fail-safe provisions to clunker deals that tell buyers that the deal may be off should the government renege. But then, the dealer will be taking back a “used” car. Ouch!

The CARS regulations run 136 pages. It is a good bet that many members of Congress have not read them. Most have not even read the legislation that will raise the overall national cost of health care and will force the government to either raise taxes or ration health care or both. Seniors, the largest consumers of health care, will be the first to feel the rationing axe.

Although your faithful observer is still puzzling over 1,000 pages of health-care legislation, I have read all 136 pages of the CARS regulations which are so full of loopholes that a freshman law student could drive a clunker right through them.

The biggest loophole is that the car mashers and/or car shredders who accept CARS clunkers from dealers have a six-month grace period during which they can remove and sell salvageable parts. So, even if the engines and drive trains have been destroyed as required by CARS, in reality, CARS will become the Cuban Automobile Restoration System.

The salvageable parts will make their way wherever savvy automobile tinkerers are found. Ever since the Kennedy-era commercial, economic and financial embargo of Cuba, the Cubans have gotten very good at keeping clunkers on the road. While CARS might make America a tad bit “greener,” the net result for Planet Earth is that many clunkers given up for dead in third-world countries will spring back to their soot-producing life on salvaged parts provided by CARS, i.e., the American taxpayer.

The penalties for violating CARS are merely civil, not criminal. Moreover, no federal law enforcement agency was provided addition funds to pursue violators. In terms of enforcement, CARS is a toothless tiger. If the cost-benefit ratio favors selling CARS parts to Mexico and, ultimately, on to Cuba, there are scofflaw outfits that will find it profitable to do so.

Last week, the House resuscitated CARS by adding $2 billion dollars. This week, the Senate will agree with the House. Then, CARS will be spending $3 billion-dollars of your tax dollars on a relatively simple program (compared to health care) that is FUBARed (technical military acronym) to the max.

As one reader wrote to The New York Times, “I can’t wait to see what these folks will do with health care!”

William Hamilton, a syndicated columnist and a featured commentator for USA Today, studied at Harvard’s JFK School of Government. Dr. Hamilton is a former assistant professor of political science and history at Nebraska Wesleyan University.